In our opinions, the only way for all of these anomalies to occur together as noted in this paper, is via systemic fraud or gross accounting error bordering on jaw-dropping incompetence.

In groovygirl’s opinion, GLD is probably a similar situation. It is my suggestion that investors hold little or no precious metals in these types of investments. If your 401k will not allow anything else, only hold a percentage of your overall portfolio that you are comfortable with.

Many intelligent people on the web that have been in the precious metals industry for 40 or 50 years believe these investment vehicles (GLD and SLV) are suspect.

However, physical gold and silver in your name with correct certificates and numbers are good alternatives. Bullion stored at the Bank of You is best.

July 28, 2009

This is a link to a series of videos that is a must see by William Pollack. This is one step beyond The Crash Course video series. Both are in my groovyresources section now.

You must prepare your mind for this change, or you will panic and be discouraged and miss the opportunities that lay ahead. This is a change on EVERY level, social, financial, economical, cultural, globally, energy, food, any system that touches your life will be altered.

This is a result of the convergence of 3 very powerful cycles coming together over a period of several years. Martin Armstrong talks about these cycles in his writings.

This is not just a normal winter K-wave cycle in the 100-year time frame, this is more intense…..every 300 years. This is a severe winter cycle.

July 27, 2009

OK, Guys, if you are not reading Tyler Durden and his blog at zerohedge (.) com. Please do. There is very valuable information there.

Today he released a very good report, it’s quite long, on the real state of the “recovery”. If you can’t read it all, then check out the table of contents and skip to what is important to your business. Don’t forget the conclusion chapter.

I disagree with Tyler that there is no threat of inflation in the future. I believe the coming hyperinflation is a currency event with nothing to do with supply-demand pricing. It is possible that hyperinflation will not be upon us for another 24 months. Deflation, then severe inflation.

I loathe to bring attention to this as we are read by the Fed and Treasury. That fact is a compliment, but the inadvertent contribution to MOPE cannot be denied.

I guess being a family member of “Our Crowd” has bought me some leeway as long as I remain economically focused and do not get personal with the real power. I will not in an attempt to look out for all our best interests.

Yesterday and today we have been playing with a key area in the US dollar at which intervention is reasonable to assume.

It is key for sure as .7200 and then into the high .6000 is what is lurking in this Battle Royal.

Strong dollar policy is intervention to modify the decline from the rout it has the power to be.

With the entire planet with the exception of GB loudly or quietly wanting dollar diversification, the high .6000s is a magnet of great substance pulling NOW strongly on the USDX.

The value of gold is all in the inverse of the value of the US dollar.

Respectfully yours,
Jim

In groovygirl’s opinion, the FED is manipulating the USDollar to stay as high as possible, in order to sell all those bonds to pay for bailouts. They are fighting harder right now, as NO ONE really wants the USDollar.

They will lose and will then try to hold at .72 and then try to hold at .60.

Get out of dollar denominated assets, buy precious metal assets.

Jim has alluded in other posts to a January 2010 date for the next leg down for the dollar.

You now have a time line, expected USDX prices, and advice for alternatives to the dollar. Protect your investments, protect your capital.

The dollar has been losing value since 2001, it will never gain it back. Sometime in the long term, it will be “revalued” when the FED can’t manipulate it anymore. The manipulation is a controlled lowering of the dollar, just like the FDIC is in the process of a controlled bank implosion. Ben is a student of the depression, one lesson he has learned, if you can’t fight the market cycle downward fall, control it, and get your friends out of harms way before you let it fall. BEWARE.

July 24, 2009

No matter what the TV spin doctors are saying, we are NOT in a recovery. We have a new bubble from all the money printing going on. This is a bear market rally, no real return on investment here.

REAL investors use price per earnings to buy and sell stocks, not just the price. This chart is much more meaningful in showing the real health of the stock market.

The S&P 500 or Wilshire 5000 have a much broader list of companies than the DOW. They are better indicators of the over all stock market than the DOW. The DOW is only about 30 stocks and it did better just by removing GM and Citibank.

This chart is of the quarterly earnings from a stock, not the price, and it is inflation-adjusted. This chart takes out inflation, manipulation, and herd mentality.

Here is a link to the latest letter from Martin Armstrong. This letter dated July 10, 2009 examines the dark pool of Goldman Sachs. Interesting read. Jim Sinclair had a link a few days ago to a video that explained how dark pools work.

July 20, 2009

Regardless of the complete lack of fundamentals, people are buying up the stock market. Insanity in my mind, but so it was the end of 2006, when I sold all my stock. Everyone thought I was nuts….buying gold for 3 years and selling the market.

I got the latest letter from Uncle Harry and he sees a bullish trend in the near future for everything, except the USDollar.

All I can say is….enter the stock market at your own risk. This uptrend has the look of an inflation, not value driven, rise. The markets are still trying to figure out if they should be trading for inflation or deflation, they could turn at any moment.

In the last winter cycle, the markets dropped, then recovered 75%, then dropped again. (I am talking about the years from 1929-1933.) Watch the ticker carefully.

Also, if the dollar continues to drop, any rise in the stock market may just be covering that drop, not gaining you any real return-purchasing power.

In light of zerohedge.blogspot.com and their excellent coverage of the Big Banks and their “black box” manipulation watch that you are not on the wrong side of the trade.

So, it’s clear that the world is going to hell in a hand basket, but what should you do?

(And if you don’t think we are going to hell in a hand basket, wait 12 months.)

The banking system is NOT fixed, the US economy is not sound or in recovery or anything of the sort. The system is broken and not fixable in the near future, no matter what the stats or TV talking heads dole out. The fundamentals for recovery are just not there.

I especially liked the “so what should I do now” section. A lot of people may be frustrated with all the bad news. Investment plans that worked 2 years ago, do not work. So, being prepared and getting educated are the first two steps. Here are some other steps from gold-eagle.com:

Protect your finances

A major challenge will be to protect your finances, especially since the normal safe-havens of treasurys, money markets, and cash are no longer safe. Verify what has been written within this webpage with other sources and evaluate your own situation accordingly. Arbitrary Vote is not offering investment advice, but here are a few ideas to help you think about such an unfamiliar situation:

Don’t play the stock market unless you are intimately familiar with the economic situation and investing. There will be continued extreme volatility in the markets and a lot of known and unknown triggers for industries to collapse, while very few winners will emerge. PE ratios are still quite high. The stock market will rise if there is inflation, but the business and currency values won’t. For example, Zimbabwe had the greatest performing stock market in the world during their hyperinflation, yet their economy was in complete collapse.

Diversify your investments. Precious metals such as gold and silver are strong with uncertainties in inflation, government, and currencies. Have at least a little gold and silver in your house as a safety fund. Also various other commodities do well in economic crises. Food/agriculture commodities could be a nice idea as they usually do quite well in inflationary environments, and food shortages are likely to be prevalent in the near future as recent major droughts and population growth are effecting food supply and demand.

Minimize your fixed income investment exposure, such as money markets, CD’s, savings accounts, or U.S. Treasurys. The amount of money you have in cash should be minimal and as liquid as possible so that you can move money to safer places in anticipation of a crisis. Note that you want to try to figure out where to put your money before the crisis happens, as once it happens, it will be too late as your money will have already lost its value.

If you have significant debt, there are two sides to the payoff argument. One side says pay off debt as quickly as possible so that you don’t run the risk of it becoming more expensive in a deflationary environment or with rising interest rates. The other side says don’t feel the need to pay off quickly as debt becomes cheaper for you as inflation kicks in; plus the government’s policy moves are likely to eventually give your debt relief anyway. Evaluate your unique personal situation and come to the best conclusion for yourself.

If relevant, get pension dollars as quickly as possible, or at least a strong understanding of your pension’s status and funding source. Pensions are extremely pained and may not be reliable sources of income.

If relevant, accelerate receiving social security payments. Social security is extremely pained and a run can be made on it. Additionally, the government is likely to decrease payment amount and extend the point at which benefits may be claimed. Aside from the payment amount decreasing, the value of the dollar amount will decrease because of inflation.

Thinking of buying a house? Housing prices may still have a long way to go down for the following reasons:

Foreclosures are still rising.

Another heavy wave of defaults is on the way from non-subprime Option ARM and Alt-A mortgages.

In many cases where the Option ARM and Alt-A problems don’t cause foreclosure, they will cause early sales that will add to inventory and/or push prices down further.

Many are leaving major residential real-estate states such as California, Florida, Michigan, New York, etc adding to inventory and/or hurting prices in those areas.

Layoffs are continuing.

Interest/mortgage rates are rising.

Loans are harder to get considering interest rates and bank reluctance.

The government’s activity is artificially propping up housing prices (even though prices are still declining).

The banks will eventually have to start moving foreclosed assets off of their books at lower prices or they will face bankruptcy/nationalization. Both scenarios are not good for housing prices.

This means lowered demand and excess and increasing supply. This translates to falling prices that will take a long time to bottom with a slow turnaround after the bottom. Keep in mind that after Japan’s housing bubble and bust in the 80’s, housing prices are still about 80% lower than they were at their peak.

This does not mean there aren’t still a few decent buys out there. Be sure people are moving to and not away from the area where you are buying, and viewing the purchase as a long-term living investment (as opposed to a 2 or 3 year flip) will likely be your best bet. After all, houses are real and valuable assets that act as shelter and will still be standing even if the surrounding economy takes an unprecedented dive.